TAG Oil Blog

PEP 38748 and Mt. Messenger do it again…the Company just announced that Sidewinder-3 is confirmed as a light oil and gas discovery. It’s been a busy couple of days: we drilled to 2160 meters about 1 km south of our Sidewinder-1 discovery, targeting a large anomaly ID’d on 3-D seismic. We encountered 15.4 meters of net oil-and-gas-bearing sandstones in the primary Sidewinder zone, including "free oil" observed over the shakers during the drilling operation.

With each new well we can more accurately calibrate our 3-D data set and better understand the geology of our acreage. In particular, Sidewinder-3 has shown that the Mt. Messenger Formation reservoir sands extend significantly to the south of the original Sidewinder discoveries, and hydrocarbons appear to have migrated into all potentially producing sands encountered to date. Good news for both near-term development and future exploration.

No time to rest on our laurels, it’s time to get busy on the Sidewinder-4 exploration well off to the east.

The sidetracked Sidewinder-2 well in PEP 38748 is confirmed as a multi-zone, light oil and gas discovery. We drilled to 1597 meters and hit 47 meters of net oil-and-gas-bearing sandstones, including "free oil" observed over the shakers during drilling…that means multiple potential pay zones. Electric log data shows excellent reservoir qualities, and better yet, even though this well has intersected and extended the main Sidewinder-1 discovery zone, we’ve also got five separate new oil-and-gas-charged pay zones, both above and below the primary target. Busy times ahead.

We put this cross section together illustrating the formations we’re intersecting, including Urenui, Mt. Messenger and Moki.

PEP 38156 (PMP 38156) came through. We drilled Cheal-B4ST to a total depth of 1810 meters, encountering 17 meters of net oil-bearing sandstones within the Urenui and Mt. Messenger Formations. Electric logs show great porosity and permeability, indicating four separate zones are likely to be oil-charged. Two of the four zones intersected are oil-bearing zones never before encountered in wells within this permit…demonstrating that the whole 7500-acre permit area is oil-prone, with multiple shallow horizons prospective for discovery.

Now it’s on to flow testing and the rest of the planned wells in our Taranaki Basin acreage.

As we start drilling Sidewinder-2, we’re hoping to encounter results similar to Sidewinder-1. One well at a time; only time will tell for sure. But we have confidence in our seismic, our New Zealand field team and recent oil and gas discoveries.

We’ve tested a conservative range of low draw-down configurations at Cheal BH-1, with production rates from 400 to 500 barrels of oil equivalent (BOE) per day. Predominantly oil with no water, just how we like it.

We’ll keep testing the full production capabilities of Cheal-BH-1 with the goal of optimizing daily flow rates and maximizing long-term reserve recovery, but this alone is great news.

Done with our 10-day sustained Sidewinder-1 production test and it’s all good. We drilled to a depth of 1601m and encountered 14 meters of net (22m gross) oil and gas bearing sandstones.

We achieved stabilized flow rates of 8.5 million cubic feet of gas plus 44 barrels of oil per day for a total of 1461 barrels of oil equivalent (“BOE”) per day, with a flowing tubing pressure of 940 psi. The 4-Point Isochronal test indicated a tubing restricted maximum gas flow rate of 13 million cubic feet per day (2167 BOE’s/day).

This may be a flow rate record from the Mt. Messenger Formation. Better still, we’ve ID’d several other lookalike prospects to drill within the permit, many accessible from the same Sidewinder surface location. Time to commercialize this discovery and initiate oil and gas production.

We’re releasing the drilling rig and mobilizing a service rig over to Cheal-BH-1 to complete our five-stage stimulation. Uphole mudlogs have recorded better than expected oil and gas shows in the secondary Urenui Formation, and in the Mt. Messenger horizontal section of the well, a total of 430m of continuous reservoir penetration is interpreted with high oil and gas readings.

All stage packers have been successfully deployed, and we’re going to have the first horizontal multi-stage fractured well in New Zealand in a matter of days.

We're quite pleased to see the results of our new light oil discovery. We drilled to a depth of 1,610 meters and hit 14 meters of net sandstone pay in the Mt. Messenger Formation. The well tested at a stabilized rate of 8.5 mmcf/d plus 44 bbl/d of oil for a total 1,461 boe/d.

And electric logs indicate excellent reservoir qualities, with average porosities of 22.5% and oil saturations of 60%.

We’ll do further testing with a couple delineation wells down-dip from the crest of the structure. Also looking at options to tie in the well…maybe build a 3 kilometre pipeline to a Vector-operated 26” trunk line. But all in all, a very exciting day for all of us here at TAG.